Trump’s hope: a recession might put him in the White House

Summary: The great and wise believed that Trump was a sideshow fool. Now that he decisively leads in the Republican race, they believe he might get the GOP nomination, but has no chance against Clinton. A simple example shows why that is not correct. If the polls are even roughly accurate, an easily imaginable event could put Trump in the White House.

Photographer: Victor J. Blue/Bloomberg

Contents

The GOP contest: Trump on top.

Hillary vs. Trump: it’s close.

Trump’s hope: a recession.

Conclusions.

More about the Trump revolution.

For More Information.

(1) The GOP contest: Trump on top

Trump’s ratings have risen despite opposition of the news media and the GOP leadership. Now he has to translate that into votes in the primaries. Civis Analytics, a Democratic data firm, has published detailed demographic data about Trump’s supporters. It is quite broad, showing that he has the necessary base. His ability to build the necessary organization remains unknown.

(2) Hillary vs. Trump

Hillary’s lead over Trump is only slightly larger than these polls’ typical 3 percentage point margin of error with a 95% level of confidence. The most recent three polls show Clinton’s lead as +7%, +2%, and then +1%. This makes the confidence of the great and wise in Hillary’s victory seem exaggerated. The election could be close if Trump builds a campaign machine and just maintains his current strength in the polls. But he might need a lucky break to win…

(3) Trump’s hope: a recession

The Atlanta Fed’s GDPnow model forecasts Q4 GDP at 1.3%; the estimate (green line) is falling. Updated graph as of Jan 6: their forecast is now +1.0%.

Real GDP has been running close to “stall speed” since 2010. Only repeated bouts of stimulus and good luck prevented a recession, which shows the deep weakness of the US economy. The red line on the following graph adds the GDPnow forecast of 1.3% for Q4. Continued slowing could easily give us negative GDP in Q2 or Q3 — for maximum effect on the election,

(4) Conclusions

Many things might tip the election to Trump — such as a serious scandal or a terrorist strike — but a recession seems the most likely of these.

Predicting recessions 6 – 9 months out is beyond the current state of the economic art. With only 17 presidential elections since WWII, we have too little evidence to determine the effect of the economy on election results (see this article by Nate Silver).

But we do know a few things. A recession is quite possible in 2016. Given the the economy’s weakness after this slow recovery, we might get a severe downturn. The economy in the year before the election clearly has a large impact. Hillary, as the candidate of the incumbent party, would suffer most from a recession. So if Trump retains his strength in the polls, this might put Trump in the White House.

(6) For More Information

A rare mention (quickly dropped) in the major media that Trump is a populist candidate: “The Great Republican Revolt” by David Frum in The Atlantic — “The GOP planned a dynastic restoration in 2016. Instead, it triggered an internal class war. Can the party reconcile the demands of its donors with the interests of its rank and file?”

4 thoughts on “Trump’s hope: a recession might put him in the White House”

A very good analysis and the link to the article on Trump supporters was great. The only thing I could think of that was not mentioned (probably because nobody knows what the effect will be) is how far the Republican party leadership is willing to go to keep Trump from winning the primary and/or the White House.

A bunch of sweetheart deals with the Democrats that benefit Trumps current supporters combined with a lack of support for Trump in the grassroots get-out-the vote effort could overcome the early stages of a recession.

The Republican leadership has been stunned by Trumps rise and has been ineffective in containing him but he stands for things that they, personally, feel is bad for the country and bad for their party in the long run. On the other hand, they have also been stunned by how effective and cheap his campaign has been to run. If they decide that he is the future and embrace him, he might be very hard to beat. If they decide to scorn him, he might fall pretty easily regardless of the economy.

For the record, I have not a single clue as to what will happen but it has been interesting to watch.

The current situation has few precedents in US history (that’s why we’re a great nation, and might not be in the future). So everybody is guessing.

There are precedents in other nations for deals between the 2 dominant parties to defeat political insurgents. One of those recently kept the National Front Party in France from controlling any regions despite their strong showing in the the first-round elections. But these are rare, especially when the insurgent is within one of the major parties.

More common is that the national elites make a deal with the insurgent. And Donald is, above all, a deal-maker. My guess is that if he does well in the primaries, the GOP elites will make a deal with him so fast our heads will spin when watching it. That is how insurgent get into the presidential palaces; it is a common story in history.

Your comments are well reasoned, as usual, FM but there is one factor I believe you might be undervaluing. The article on the Trump supporters does a very good job of documenting how they angry they are about the Republican leadership and I suspect that the opposite is also true. That the Republican leadership has slowly awakened to the fact that they can either hang on to this base of angry, confused, poor, and increasingly elderly white men or they can still be a national political party in 30 years but they cannot do both. This leaves the question of when would be be the best time to make the break with their base. If I were them, I would choose now over later, but since I am not them, I will have to wait to see what they decide.

Another issue is that the Republican leadership and Fox News have both realized that the Donald doesn’t really play well with anybody in either party. This will make the task of governing effectively all the harder. I cannot imagine Trump winning a re-election campaign in 2020 which will weigh on their decision to make a deal with Trump. Although in 2008 I admit that I didn’t think the winner of the 2008 election could possibly win in 2012 but I overestimated the Republican candidate pool for 2012.